Home Office ministers have ordered weekly reports on the progress of two new contracts with the private security companies G4S and Serco to house and provide support services for thousands of asylum seekers and their families.

The chief executive of the UK Border Agency (UKBA), Rob Whiteman, has confirmed that serious concerns about the ability of the two companies to find housing for thousands of asylum seekers across the north of England by November has led to closer monitoring at the most senior levels of the Home Office.

The £883m a year Compass contract to provide support services for dispersed asylum seekers is the largest project run by the Home Office. The two private security companies took over the five-year asylum housing contracts in four of the six UKBA regions across Britain from social landlords, including councils, in March.

The companies were expected to start moving people in June. But after a contractual dispute G4S dropped its housing subcontractor for the Yorkshire and Humberside region, United Property Management, in June and its new subcontractors have yet to find enough homes.

Two councils, Sheffield and Kirklees, have raised concerns about their ability to deliver the housing contract within the expected timetable. Kirklees council said that a fortnight ago, only one family out of 240 asylum seekers had been moved as part of the transition from the council to the new providers.

"There are 240 asylum seekers being assisted. We understand the subcontractors are finding it difficult to procure accommodation and the council has been asked to continue to provide assistance until the end of October. There is no suggestion however that the council's contract will be renewed after this time,"

Whiteman has told the Commons public accounts committee there were also concerns about the two Serco contracts, one covering north-west England and the other Scotland and Northern Ireland, including the "speed at which properties are being acquired".

He said the issue had been "escalated" to directly involve himself and Jeremy Oppenheim, the UKBA director of immigration and settlement. Weekly reports are also being sent to ministers.

"It is not at this stage anywhere near penalties because they are acting within the contract in terms of how the work is handed over to them," Whiteman told MPs. "We do have concerns about mobilisation. We are escalating this and I have been involved in meetings on that but it is at a relatively early stage." He added there were other remedies available under the contracts but he hoped the difficulties would be resolved.

G4S has denied it is experiencing difficulties in finding accommodation for asylum seekers in any of its contract areas: "The current contractors – the Yorkshire and Humberside consortium – have a contract to manage service users until 2 November 2012. We're on track to move everyone out of their properties where this is required by that date. We have agreed we will move households in some areas at a faster rate than this so some areas will be complete by the end of September rather than the end of November," said a company statement.

Margaret Hodge, the public accounts committee chair, raised the issue with the UKBA after hearing concerns that the companies had signed the contracts but not secured accommodation.

The UKBA said it expected the new providers to fulfil the terms of the contracts: "We are working closely with them to ensure the majority of people will continue living in their current properties. Where people do need to move proper consideration will be given to ensure minimum disruption."